Citibank maintained its forecast for the Hang Seng Index, which may not have much upside potential this year.
The bank maintained its mid-year target for the HSI at 27,500, with a year-end target of 28,800. Compared with 26,458.95 points of HSI on Wednesday, both have around 4 percent and 9 percent upside potential from the current level.
Chinese stocks, the major component of HSI, will see their future performance mainly depend on their earnings, which are still lagging behind in 2025. The extent of any significant and comprehensive recovery in earnings will rely on mainland consumer confidence and property prices, said Liu Ka-ho, head of investment strategy and portfolio advisory at Citibank Hong Kong.
Regarding US stocks, Citi's target prices for the S&P 500 index in June and December of this year are 7,200 points and 7,700 points, respectively.
Liu stated that they will continue to outweigh US stocks and interest rate cuts, robust earnings, and the development of artificial intelligence are positive factors for US stocks.
He pointed out that the revenue growth rate of the four major cloud giants in the US has expanded to 30 percent, reflecting the market need of AI, and the backlog of orders has also increased significantly.
The lender also forecast the city's residential property prices may rise by 3 percent year-on-year in 2026, and will launch a multi-year upward cycle, as the housing supply will remain low.
Following the political upheaval in Venezuela, Liu pointed out that the impact on the market was short-lived and limited, as the country's oil supply has always been limited, thus having little impact on overall oil prices.
